Is the bull market over? Let the data speak for itself.
Since April 14, when the price of bitcoin surged to an all-time high of $64,840, it has since turned downward, with the price now down more than 50% to $32,000. Bitcoin’s total market cap has also fallen from $1.18 trillion to $610 billion. Is the bull market over? Is it a bear market now? In recent times, there has been a lot of debate about bulls and bears, so here are some indicators to see which side the market is on right now.
1 On the side of the bears
1) Bitcoin Mining Difficulty to See a Trifecta of Downgrades, the Longest Since the Bear Market Bottomed in 2018
According to data provided by BTC.com, bitcoin’s mining difficulty is set to drop by 11.12%. the network recorded two difficulty downgrades (-5.30% and -15.97%, respectively) on June 6 and May 30, with mining difficulty dropping from 25.046 T to 19.932 T in one month. bitcoin last saw three consecutive mining difficulty downgrades in 2018 In December 2018, the cryptocurrency market was in the midst of a miner-induced “death spiral”: miners were shutting down, and the price of BTC fell rapidly, hitting a low of $3,125 on December 15, 2018, an 84% retracement from its December 2017 high.
2) Institutional sell-off: Bitcoin fund holdings hit four-month low
Bytetreeam data shows that bitcoin holdings across all types of bitcoin funds (U.S. and Canadian closed-end funds and Canadian and European bitcoin ETF data statistics) stood at 782,558 coins as of June 19, a significant reduction of more than 15,000 coins in three days and the lowest level since Feb. 25. Bitcoin holdings across all types of bitcoin funds have increased by more than 300,000 bitcoins since October 2020, peaking at more than 817,000 on May 12, and have been declining ever since.
3) 120-Day SMA Lost
For traders, the 120-day SMA is a lifeline that reflects the price trend of an asset, and is an important indicator to judge the medium to long-term trend of asset prices, and has a strong role in helping prices move up and down. That is: in the price for a long time below the 120-day SMA, once the breakthrough of the average line usually represents a reversal of the market, open up the upward trend. When the price is above the 120-day SMA for a long period of time, a break below it usually represents a downward trend.
Bitcoin’s last bull market started in October 2015, signaled by the BTC price breaking through $250 and standing on the 120-day SMA. in January 2018, the BTC price fell below $10,000 and lost the 120-day SMA. The period lasted 2 years and saw a 40-fold increase.
The bull market, which originally started in March 2019, was signaled by the BTC price breaking through $3,800 and standing on the 120-day SMA. However, the “312” black swan event disrupted this rhythm. In May 2021, the price of BTC fell below $50,000 and lost its 120-day SMA. The period lasted 1 year and rose 6 times.
4) Entering a “Death Cross”
The bitcoin price has now entered a “death cross”. According to a previous Coindesk article, a “death cross” could signal a bitcoin bear market. A death cross is said to occur when the 50-day moving average is below the 200-day moving average. If this happens, bitcoin could enter bear market territory similar to 2018. Previous death crosses have led to further bitcoin price declines of 70% and 47% in 2018 and 2019.
5) The “biggest pain point” declined for two consecutive months
This Friday (June 25) is the options market delivery day. The total number of contracts expiring this time is 68,586 BTC, and the maximum pain point is $40,000. The maximum pain point means that at this price the option buyer suffers the most, i.e. loses the most, i.e. loses all the premium, while the option seller (mostly institutions) makes the most profit. The option price is a guide to the spot price, and when the option price is higher than the spot price, it indicates a bullish aftermarket, and vice versa. Since April, the maximum pain point has been declining, indicating that the market is not optimistic about the aftermarket.
6) Landmark Events Emerge
In the last bull market, bitcoin reached its bull market high on the day the CME Chicago Board of Trade launched bitcoin futures trading. This bull market round, bitcoin reached its highest point on the day it was listed on the Coinbase exchange.
The Ether Foundation cashed out. At the high point of the last bull market, V-God arranged for the foundation to sell 70,000 Ether around the Ether price of $1,400, while selling 30,000 of its own holdings, cashing out at $22 million. On May 17 of this year, the Ether Foundation address transferred 35,000 ETH to the exchange, worth about $123 million.
Coinbase #1 in downloads. in December 2017, the bitcoin trading platform Coinbase APP reached #1 on the US Apple Store app charts. in May 2021, the cryptocurrency trading platform Coinbase’s app surpassed TikTok, YouTube, Facebook, Instagram and Robinhood to top the free app charts in the U.S. Apple App Store.
2 On the side of the bulls
1) PlanB: Bitcoin Ends the Year at $135,000
The BTC-S2F model, which PlanB helped create, is the most solid model to guide Bitcoin believers. According to the model, bitcoin is currently reasonably valued at $92,000. planB tweeted today that bitcoin could be trading at $135,000 by the end of 2021.
In general, the BTC-S2F model has remained broadly consistent with the Bitcoin price over the past few years, with the BTC price fluctuating up and down around this indicator. Currently, BTC price sits below this indicator and needs to rise to return to a reasonable valuation position.
2) Jiang Zhuoer’s 60-day cumulative BTC increase
The Jiang Zhuoer 60-Day Cumulative BTC Gain indicator was created by Jiang Zhuoer, CEO of Lepit Mining Pool. The author believes that when a bull market reaches the end of a round of market sentiment frenzy, the bubble is so severe that the short-term coin price rises faster than the new money entering the market, the bull market bubble will burst and the bear market will begin. This process is described in mathematical language as a “60-day cumulative increase” too high .
At the top of the two bull markets in 2013 and 2017, the indicator was 237% and 134% respectively. Currently, the indicator is -38.25%. Even when Bitcoin hit $64,000 a while ago, the indicator was 34%. The range is much lower than the previous two times.
3) The total value of bitcoin transferred from mining pools to exchanges by miners is continuing to decline
According to CryptoQuant data, which combines data from several major mining pools including Binance Pool, BTC.com, BTC.top, F2Pool, Poolin, Slush, and Viabtc, the total value of bitcoin transferred by miners from pools to exchanges has been steadily declining since January 2021. This indicates that miners are smashing less. However, the data counts the decreasing value of bitcoin transferred to exchanges, and thus, the data does not directly indicate that miners are shying away from selling bitcoin. First, the price of bitcoin has been nearing a cut since the beginning of the year. Second, the path of large bitcoin sales by miners is not necessarily on exchanges.
4) Spot exchange inflows have fallen to the lowest level in the past month
According to AMBCrypto news, according to CryptoQuant data, spot exchange inflows have fallen to the lowest level in the past month. The drop in spot inflows can be inferred as a major indicator of falling selling pressure.
5) Su Zhu, Founder of Three Arrows Capital: Bitcoin Rises to $72,000
Three Arrows Capital has a significant presence in global emerging market FX trading, at one point accounting for nearly 8% of global emerging market FX trading volume. Su Zhu, the founder of Three Arrows Capital, has a keen sense of the market having worked as a derivatives trader at Credit Suisse and Deutsche Bank in Hong Kong prior to founding Three Arrows Capital.
On May 8, Su Zhu tweeted a hint that bitcoin had risen to $72,000. However, the bitcoin price has continued to fall since then. Recently, he said on his podcast that pullbacks, while brutal, do not necessarily indicate that the entire market has knotted and that institutional investors can take advantage of pullbacks to enter the market.
6) Bloomberg Cryptocurrency Report: Bitcoin’s Next Step Is $100,000
On June 4, Bloomberg BI Senior Commodity Strategy Analyst Mike McGlone released a report, “Bloomberg Crypto Outlook-Discounted and Refreshed,” which points out that Bitcoin is more likely to break through resistance and rise to $100,000, rather than rather than falling below $20,000.
The logic supporting this argument is that bitcoin’s 260-day volatility is down to its lowest level ever compared to most major asset classes (especially the S&P 500). Bitcoin production reductions have led to a reduction in daily supply, the entry of institutional investors, ethereum futures, and the launch of ETFs in Canada and Europe.
7) Project funding continues
In the last 5 days alone, there have been at least 12 projects in the industry that have announced funding of over $400 million.
8) Listed companies keep buying
On June 21, MicroStrategy purchased 13,005 bitcoins for $489 million in cash at an average price of $37,617 per bitcoin. As of June 21, it had acquired a total of 105,085 bitcoins for $2.741 billion, at an average price of $26,080 per bitcoin.
In addition, Bitcoin has locked in the Taproot upgrade, which is expected to be activated in November. The Ether London upgrade will go live on July 14, which will likely make a huge difference to the entire Ether ecosystem and even the market. the L2 story has yet to unfold, and NFT is equally worth waiting for. There are also countries like El Salvador that have made Bitcoin legal tender, and other smaller countries like Paraguay are likely to follow. As well as news that the Fed is unlikely to raise interest rates this year seems to be supporting that the bull market will continue.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/half-iceberg-and-half-flame-btc-is-suffering-from-both-bull-and-bear/
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